Companies (or bodies corporate) are eligible to be treated as members of a group if:
- the prospective representative member has an established place of practice in the UK; and
- one of the companies controls each of the others; or
- an individual, a company or a partnership controls all of them.
One body controls another if it is empowered by statute to control that body's activities, or if it is that body's holding company within the meaning of section 1159 of the Companies Act 2006. An individual may be regarded as a controlling body if the individual holds control over the other bodies in the same way as a holding company.
If you wish to apply for group treatment, you must nominate one of the members of the group to act as the 'representative member'. The application must be made no earlier than 90 days before the date from which it is to take effect, unless we have allowed a different time.
All the companies in the prospective group must be parties to the application but any one of those companies (or the person controlling them) can make the application.
For guidance on how to make the application for group treatment, see the separate guidance covering How to register for SLfT.
If we accept the application, the companies are to be treated as a group from the beginning of an accounting period, and the company named in the application as the representative member will thereafter be treated as the representative member. We can only refuse an application if it appears to us that it is necessary to do for the purposes of protecting the revenue.
Once the application is accepted:
- any liability of a member of the group to pay tax is to be taken to be a liability of the representative member;
- the representative member is to be taken to carry out any taxable activities which a member of the group would carry out (see SLfT1002) – note that all taxable disposals made between members of the group must be accounted for and any tax paid; and
- all members of the group will then be jointly and severally liable for any tax due from the representative member.
Changes to group registration once it is in place
Once the group registration is in place, changes can be made to either group membership (adding or removing a member) or the representative member by one of the members making a further application to us.
In addition, if it appears to us that a company that we have treated as a member of a group because it was controlled by any person has subsequently ceased to be so controlled, then we will notify that person that from a specified date we will no longer treat that company as a member of the group.